The Determinants of Credit Union Failure: Insights from the United Kingdom

Jamie Coen, William Francis () and May Rostom
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Jamie Coen: Bank of England, London School of Economics

International Journal of Central Banking, 2019, vol. 15, issue 4, 207-240

Abstract: We use a proprietary data set on credit unions from the United Kingdom to develop an early-warning model of credit union failure. We find that a small set of financial attributes related to capital adequacy, asset quality, earnings performance, and liquidity, augmented with unemployment rates, reliably identifies failures within one year. Our results support the existing literature which, to date, has largely relied on data from the United States. This work therefore provides further evidence for establishing early-warning criteria for use by international regulators.

JEL-codes: G21 G28 G38 (search for similar items in EconPapers)
Date: 2019
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